128 new garment factories in 15 months
Despite the prevailing economic crisis, student-people uprising, and political changeover, new investments continue to flow into the export-oriented ready-made garment (RMG) sector, creating fresh employment opportunities. On the flip side, there are some factories that ceased operation during the period.
According to a source at the Bangladesh Garment Manufacturers and Exporters Association (BGMEA), a total of 128 new factories joined the association as members between January last year and March this year. Once fully operational, they are expected to facilitate employment for as many as 74,000 people.
Besides, there are instances where entrepreneurs made fresh investments to boost the production capacity of old factories.
At the same time, some 113 BGMEA-member factories have closed during the 15-month period, forcing as many as 96,104 workers to lose their jobs. Among them, 69 announced closure after August last year.
Despite the openings and closures, exports from the RMG sector have increased. According to the Export Promotion Bureau (EPB), garment exports totaled USD 32.5 billion in the first nine months of the current 2024–25 fiscal year (July to March), which is up by 10.84 per cent compared to the same period in 2023–24.
Among the new BGMEA members are AKH Outerwear, AZ Composite, Nexton, LSA Apparels, Citec Fashion, Supreme Outfit, and Sparrow Greentech. Of the 128 new factories, 18 are expected to employ over 1,000 workers each. It means the factories are mostly small to medium-sized enterprises.
AZ Composite went into trial production in Gazipur last year. It employs 150 workers now, and the number is expected to rise to 700-800 workers after commencing full production. The key investors have long been involved in the buying house business.
“We will go into full-swing production after the holy Eid-ul-Azha. Our workforce will then grow to 700–800,” said Zahirul Hasan, Managing Director of AZ Composite.
Sparrow Group of Industries, a leading RMG exporter that started operations in 1984, launched a new factory named Sparrow Greentech in Gazipur last September, creating 1,800 new jobs. With the latest ones, its total workforce now stands at 18,000. It exported garments worth $300 million last year.
Sparrow Group managing director Shovon Islam said the new factory is performing well. However, purchase orders for the upcoming autumn season have declined due to uncertainty following the imposition of reciprocal tariff by US president Donald Trump.
In this regard, former BGMEA director Mohiuddin Rubel told Prothom Alo that many large and medium factories are expanding their production capacity and investing in modern technology, including artificial intelligence (AI). Also, there are new openings, which are eventually leading to a growth in exports.
However, the cost of business increased and the small factories are struggling to survive, he added.
Among the closed factories are 24 units of the Beximco Group, four of Keya Group, and four of TNZ. Some of the 24 Beximco factories had no existence.
On 28 February, some 14 factories of Beximco were declared closed, affecting 31,679 workers and 1,565 other employees. The government provided Tk 5.25 billion to settle dues for these workers, though many from other closed factories have not yet received their payments.
Mahmud Hasan Khan, former BGMEA vice-president, said it is a continuous process that some factories open while others close. The reciprocal tariffs imposed by president Trump created pressure as well as uncertainty. Until it is fixed, investors will remain cautious.”
He further noted that the law and order situation has improved significantly over the past six months. Many investors will wait until the next national election. However, those who have opened letters of credit to import machinery will not delay.